Opportunities to reach new markets

- Some of the best examples of reaching out to new segments and expanding business within your current customer segments, can be found in the food industry. Who knew that we needed frozen yogurt to take with us on the road? Identifying customer segments and targets can help you customize your promotional programs. And you can adjust other parts of your marketing mix, such as the product and pricing to expanding new segments for growth as well. There are a few key buckets we can consider. Getting greater share of wallet from your current customers.

Expanding penetration into smaller segments. And getting nonconsumers to consume. Let's start with growing your share of what your current customers spend. This can be done by adding new products, services and features that will be appealing to your biggest customer segment. Let's imagine you run an airline. And the segment you've traditionally targeted is the business traveler. You've liked them as customers because they tend to buy tickets later or make changes to their itineraries, which is led to higher prices and revenues for you.

You might begin a plan to expand your share of wallet with these customers by exploring other services or amenities that you could add to keep your business travelers using your airline more frequently. For example, perhaps you could add on-plane WiFi services for your frequent flyers. Or included in the price of certain fare classes. You could consider concierge services for a fee to help get them into, through, and out of the airport faster. In essence, you're looking for ways to increase your share of the money this customer spends on travel services.

Expanding your penetration into other customer segments that aren't your big targets can help convert them to become more consistent customers. Some companies make the mistake of focusing on their biggest customer segment, and virtually ignoring all the others. I certainly don't want to advocate taking your eye off of your best customer segments because there's something to be said for focus. But it may be worth while to look at some other segments to see if you can identify sources of growth. Going back to our airline example.

Even though the business travelers' your primary target, you likely can get some valuable growth from other segments, such as the vacationing family, convention or group travelers, or the retiree segment. In other words, going after new or different segments by using new promotional programs can help you expand without necessarily requiring new products or service offerings. Yet another bucket of untapped growth could be to find new markets that aren't buying form you at all. Why aren't they buying from you? It could be that they're not aware of your offerings.

Or maybe your message signals that you don't think of them as your customers. I encourage you to take a look at these nonconsumers, and see if you could do something to bring them into your client list. Uncovering opportunities in these three buckets, may require some innovative thinking. Researchers at the Christensen Insitute work for the popular fast food chain to segment their consumers buying milk shakes. They started by observing when people were buying milkshakes. What they learned may surprise you.

They saw a large volume of milkshakes sales occurring in the morning. In fact, 40% of all milkshake sales at one location, were to early morning commuters taking the product to go. Now when I was growing up mom didn't make milkshakes for me before I went off to school. So I haven't though of milkshakes as being a good cornerstone to a good breakfast. But after identifying this segment of the market, of early morning purchasers, the researchers interviewed the consumers to understand why people were buying milkshakes at this time of day.

What they learned was that morning milkshake-buyers wanted something to snack on during a long commute to work. And a milkshake was not as messy as a muffin, donuts, or sticky fruit. Getting to this insight, started by looking at the customer segments differently. Interviewing them, and then thinking creatively about what these customers were trying to acheive with the product purchase. Now, the fast food company can see some new options. One may be to get these early morning commuters to buy more products while going through the drive-through to grow their share of wallet.

Another maybe to target other segments of their customers that weren't buying milkshakes to see if they can convert them to becoming milkshake customers too. And finally, now that they have this insight, the people are looking for snacks to occupy the drive, they could do some product development efforts to find offerings that may appeal to other customer segments that aren't interested in milkshakes, and don't usually go to fast food places. Segmenting your customers and targets by geography, demographics, behaviors, usage rates, psychographics and the benefits sought, should be done to identify not only who your best customers are, but also to learn where you have opportunities for growth.

When it comes to developing innovations for your business, there are several methodologies and techniques to apply. If you haven't done so already, I suggest you watch Drew Boyd's Innovation course here on lynda.com for more ideas.